Italy Fines Apple and Samsung Up to €10 Million for Slowing Down Phones

Both tech giants have been accused by the Italian Competition Authority of unfair commercial practices for allegedly deliberately reducing the functionality of older phone models.

Italy’s Competition Authority announced in a statement today that it was fining Apple 10 million (US$11.5 million) and Samsung Electronics 5 million (US$5.7 million) for "software updates that have caused serious troubles and/or have reduced functionality of some mobile phones." 

The ruling comes after accusations started circulating that the manufacturers deliberately encouraged operating system updates for older phones that would slow them down in order to prompt users to buy new devices.

Unfair commercial practices

The organisation accused the two tech giants of "unfair commercial practices in violation of Articles 20, 21, 22 and 24 of the Consumer Code in relation to the release of some firmware updates for their mobile phones which caused serious malfunctions and significantly reduced their performance, in this way speeding up their replacement with more recent products."

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The Italian body also said the firms pushed customers into the problematic upgrades by "insistently proposing to proceed with the download."

Samsung allegedly prompted Galaxy Note 4 owners to install a new version of Google’s Android operating system intended for the 7 model. The upgrade was then reported to have rendered the device sluggish.

Meanwhile, Apple is said to have recommended its iPhone 6 customers install an operating system for the more recent 7 model. The update then was found to cause issues for the older version.

Italy’s competition authority noted that there was a "significant information asymmetry of consumers vis-a-vis the producers – to install software updates that are not adequately supported by their devices, without adequately informing them, nor providing them an effective way to recover the full functionality of their devices."

Samsung was further accused of implementing high repair costs for out-of-warranty devices for the malfunctions their suggested upgrades caused. Apple, said the Italian body, did not provide clients with sufficient support options once their legal warranties expired and failed to adequately inform consumers about crucial information regarding their devices' lithium batteries resulting in overall smartphone deterioration.

Maximum prescribed fines

The authority said the companies were given the "maximum prescribed fines" due to their size and the seriousness of the allegations brought against them. "Both companies will also be required to publish an amending declaration on the Italian page of their websites informing about Authority's resolution with a link to its assessment decision," also stated the organization's official statement.

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So far, Samsung has responded to The Guardian through a spokesperson denying the accusations. “Samsung did not issue any software update that reduced the Galaxy Note 4’s performance. In contrast, Samsung has always released software updates enabling our customers to have the best experience possible.” 

 

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